MNGT 213 podcast

The podcast discusses the economic impact of hosting major football tournaments like the World Cup. They believe that hosting these tournaments boosts the local economy, but they will use evidence to check. They will use a t-test to compare economic numbers before and after the tournaments. They assume the data follows a normal distribution and that the observations are independent. They will take a sample from major international tournaments since 2000. They predict that they will reject the null hypothesis and find evidence that hosting tournaments boosts the economy. They interview an economist from Qatar who shares the benefits of hosting the World Cup, such as increased tourism, infrastructure development, and local business growth. They believe the long-term impact on the economy is positive. They discuss how to carry out the t-test and mention limitations, such as other external factors that could affect the economy. They suggest expanding the question to other sports tournament Hey football fans, here we are in another episode of Economics Corporate. My name is Gonzalo and with me are Luis, Santiago, Nicolás and today our expert Manuel. Today our podcast topic of discussion is going to be about the money side of the FIFA game. We are going to talk about football economics and the impact on cities and or countries of hosting major tournaments such as the World Cup or the Euro Cup for example. Hello everyone, yes that's right Gonzalo, today we are diving into the economic side of major football tournaments. In the world of football it's not just about the roar of the crowd and the love of the game. It's the story of economics where the tears of the crowd are mirrored by the revenue and investments of it. Therefore the success of the tournament isn't just measured in goals but also in the economic prosperity it brings to cities and to whole nations. So on today's episode we have a big question. Does hosting major football tournaments really boost the local economy? We say yes it does but it is important to use the evidence to check. That sounds great, ok so let's talk a bit about hypothesis testing Luis. Certainly, the null hypothesis HO says hosting tournaments doesn't impact the local economy. The alternative H1 says it does and we are leaning towards that. Yeah but I would say we are not getting too fancy with tests. For our hypothesis we are using a t-test, a simple tool to compare economic numbers before and after the major tournaments. But before we dive deep into the numbers let's talk about some assumptions. We assume our data follows a normal distribution, you know, that bell shaped curve. This means the values are symmetric about the mean. Also, let me state that we do make an assumption too. This is independence. It means that the observations in each group like pre-tournament and post-tournament data points should be independent. In simpler terms this means that what's happening with one set of data points shouldn't be influenced in any manner by what's happening with another set. Ok so let's talk about how we take a sample for this hypothesis test. Our sample will be a simple random sample taken from the major international football tournaments since 2000. This includes World Cups and European Championships. Now, moving on to possible outcomes, our prediction is we will reject the null hypothesis HO when we conduct the test. This is because we think as tournaments take place attention is drawn to the beauty of different countries which really encourages tourism. People travel from all around the world to see the beautiful sights and structures in the countries where the World Cup takes place. To support why we predict this, we have today our expert Manuel, the economist from Qatar. Hello Manuel, nice to have you on the show. Hello Nicolas. Yes, thank you. It's a pleasure to be here. Great, so let's speak about it. Qatar obviously hosting the FIFA World Cup has been a monumental event for the whole world. But can you give us some insights into economic benefits your country has witnessed because of the World Cup? Of course, the FIFA World Cup is the largest sport tournament in the whole world and it happens every four years. Fortunately for Qatar, the 2022 World Cup was held in our country and it has been a game changer for our nation in various ways. Firstly, let's talk about tourism. Hosting such a globally significant event has put Qatar on the map for football enthusiasts worldwide. The influx of tourists during the tournament and the subsequent months has been staggering, contributing significantly to our tourism sector. That's pretty impressive Manuel. Tourism alone can have such a massive impact. But now let's speak about infrastructure. Have you witnessed any improvements because of the World Cup? Infrastructure development has been another cornerstone. The World Cup acted as a catalyst for Qatar to invest heavily in infrastructure projects. We have created existing stadiums, built state-of-the-art facilities and improved transportation networks. These investments not only enhanced the tournament experience but left a lasting legacy for our citizens. Amazing, amazing. But now, are there any more effects the World Cup had on Qatar that you would like to tell us? For sure, the development of local businesses has been a feature of our country that is on a whole other level. The World Cup created a surge in economic activity. Local businesses, from hospitality to small vendors, experienced increased demand. The exposure generated by the tournament encouraged entrepreneurship and innovation, forcing a vibrant economic environment. That's a holistic approach Manel. Tourism, infrastructure and local business development. It sounds like the World Cup has been a very good cause for your country, right? Do you agree with me? Absolutely, I do. It's not just about the event itself. It's about the long-term impact it leaves on the economy and the community. Let's not forget that this doesn't only apply to Qatar. I am aware that the 2010 World Cup in South Africa and the 2016 Europe Cup in France also hugely boosted local economies. Thank you Manel for the incredible insight. Once again, lovely to have you on the show. Now let's move to how we actually carry out our t-test. So, when it comes to conducting our t-test, we would use a 1% significance level. This is so we have as much confidence in our evidence as possible. Based on our t-test, if our test statistic is greater than our critical value, we would reject H0. This means, at the 1% significance level, we would have evidence to reject H0 and accept our alternative hypothesis. In other words, this means we would have sufficient evidence to suggest that hosting major tournaments boosts the economy of the city or country. However, if our test statistic is less than our critical value, we would not reject H0. This means, at the 1% level, according to our evidence, we would have insufficient evidence to suggest that hosting tournaments boosts the local economy. However, our hypothesis test does have some limitations. There can always be other external factors which boost the economy, not just hosting football tournaments. Global events affect economies, for example coronavirus. The worst of the virus has passed and the economy has since begun to recover, and this could be a factor in the economic rise in 2022 at the time of the Qatar World Cup. For that reason, it's important we use a variety of different tournaments from different periods to improve our sample representativeness. We could even expand this question beyond football tournaments and look at other sports like the rugby world cup or the cricket world cup and see if hosting this impacts the economy. Okay guys, that's all on our money talk about hosting football tournaments. We hope this podcast was a fun ride making you think about the cash behind the goals. Thank you for tuning in to EconXcobot. We've explored the intricate links between football tournaments and their economic impact. Special thanks also to Manuel and in general to our team for this enlightening discussion. Stay tuned for more captivating conversations on sports economics. Until next time, keep scoring goals both on and off the field. Thanks very much and bye. Bye guys. Bye.